Word: gallo
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Jackson has the ego and pocketbook to do the job, and his efforts have paid off in a rare, unfiltered glimpse into the inner workings of the family-owned Gallo empire, the country's largest vintner, with sales last year of $1.2 billion. Gallo's wines may vary in quality, but its marketing and distribution muscle is top shelf. Turning Leaf turns up everywhere, and with good reason. Aided by a series of confidential memos, Jackson's lawyers showed how Gallo executives, pressured by their demanding chairman Ernest Gallo, took careful aim at the leader of the popularly priced Chardonnay...
Kendall-Jackson, whose total ad budget is $1 million, never knew what hit it. By late 1995, after a heady decade of 15%-to-20% annual sales growth, Vintner's Reserve Chardonnay began to falter. Gallo's Turning Leaf, priced at $6, was cheaper than Kendall-Jackson's $10 bottle; but its packaging, from the flanged top, visible cork and thin, cigar-band neck wrapper down to its multicolored grape leaf, was strikingly similar...
...internal documents illustrated, Gallo had methodically tested every element of the labels and packaging of Kendall-Jackson and other brands to see what consumers liked. At a January 1994 meeting, Ernest Gallo set his goal: "We want to do in one year what it took Kendall-Jackson 10 years to do in a field they had to themselves...
...Gallo had no choice. The market for its flagship jug wines was shrinking, and it desperately needed some winners in the higher price ranges. But the Gallo name was a problem. Focus groups identified it with cheap wine and high-alcohol brands like Thunderbird...
When Turning Leaf hit the shelves in September 1995, the only hint of its origin was the Modesto, California, address; the word Gallo was nowhere to be found. Boosted by advertising, the wine sold 1.3 million cases in 1996, second to Kendall-Jackson. In April 1996, after hearing complaints that consumers thought Turning Leaf was his product, Jackson sued...